In today’s time, payday loans are still considered a controversial topic in the US. While most US residents believe that such financial services are distasteful and inhumane, others believe that businesses should be free to operate as they please. Since states have the power to regulate payday loans and lending within their borders, the rules and regulations will depend on the states.
Are online payday loans legal in Arizona? The legal status of payday loans AZ is that it has been illegal in the state for roughly a decade. Additionally, the law that protected payday lenders expired in 2010. Most lenders tried to overrun the laws by reinstating such financial services under different names; however, the laws have always been upheld.
Before we get into the gist of this article, let us first learn some basics about payday loans. It is an unsecured loan provided to people with a bank account, personal IDs, and salary proof. The employment history and the salary proofs are taken into account to receive the money. Once the documents are checked and verified, the cash is transferred within 24 hours in account transfer, cash, or cheque.
In most cases, the money needs to be repaid by the next payday or two weeks, whichever comes early. The borrower will have to provide a cheque or permission for the lender to transfer the amount electronically on the payday. If the payment is not made, you will have to pay extra charges.
Unlike other consumer and personal loans, payday ones work a bit differently. Depending on the place you reside, you can secure such financial service from a physical lender or get payday loans online Arizona.
As mentioned previously, each state has unique payday loans laws. This includes the amount you can borrow, the fees and interest, etc. However, there are also certain states where such financial services are prohibited.
After your request for a payday loan is approved, you will receive the amount in a cheque or cash. You will have to repay the loan within the next two weeks or by your next paycheck.
In most cases, you will have to pay a finance fee or charge along with the payday loan; the charge you will have to pay will depend on your loan amount. Since fast payday loans have short repayment terms, they will have a very steep APR (Annual Percentage Rate). Based on studies, it has been found that you will have to pay an APR of approximately 400% or even more.
Despite these high costs, it has been estimated that more than 2.5% of US residents take payday loans each year. However, there are many reasons for the same – for instance, these individuals have no access to other financing options. Alternatively, they may have no sufficient income or a poor credit score, preventing them from acquiring personal advances with better terms.
Independent lenders will have different requirements to meet if you want such financial service. However, there are specific requirements that remain the same; they include:
Despite its negative reputation, there are certain advantages of Arizona budget payday loans; they include the following:
One of the most important advantages of payday loans is easy accessibility. In most cases, you can avail money from the lender well within 24 hours, and the lending decision is instant. If you are applying for an online loan, the application is processed within a few hours. Additionally, you can access easy payday loans at any time of the day.
When it comes to traditional loans, you will be expected to fulfill specific requirements, like getting done with credit checks and providing proofs like income proof, photo ID, social security number, etc. Once these requirements check out, you will be provided with the money, and all this information is used to verify whether you can repay the cash or not.
In the case of instant same-day payday loans, you do not have to provide a lot of information. Some requirements include age proof, social security number/government-issued ID, proof of income, and an active bank account. Having fewer requirements makes it more convenient to get payday loans.
You will need to have a good credit score to apply for a traditional loan and get approved. On the other hand, with payday loans, you do not have to provide a credit history for such financial service. Since there is no credit check, there will be no hard credit inquiry, which can decrease your credit score significantly.
While payday loans can be used to improve the credit score, there are cases when the loans will not help you build credit. In such cases, you will have to look for better types of loans.
Unlike certain types of loans like mortgages, traditional auto loans, and car title loans, these financial services cannot be secured by your personal property. This means that if you cannot pay, the lender cannot seize your properties.
While the lender cannot seize your property, they will have access to your account as a part of the payday loan deal. Alternatively, the lender can also take you to court to settle the outstanding balance or send your debts to collections.
Now, let us check some cons:
Depending on the state where you reside, such financial services can have very high-interest rates – on average, it is not less than 400%. Credit card interest rates can range between 12% and 30%, and personal loans can have 4% to 36% interest rates.
For example, if you borrow a sum of $500, you will have to repay an additional sum of $55 to $100 as interest. This makes it challenging to repay payday loans.
Predatory loans are those whose terms are unaffordable, misleading, and unfair. Users can get trapped in a cycle of debt. The costs can escalate very quickly. Additionally, you can be forced to roll the loan repeatedly if you cannot repay the loan, which will keep accumulating new fees. This is particularly useful information to consider if you want to guess how many payday loans can you have.
Each time you keep extending your cash payday loans, you will accumulate additional fees. Overall, this will increase your out-of-pocket expenses if you keep borrowing the cash.
Based on studies, it has been found that 1 out of 4 Arizonians will borrow at least nine times. Rerolling the payday loans also increases the time it can take to repay the amount. On average, you can easily extend the original 2-week terms to months or even years.
Based on reports, it has been found that lenders mostly target minority and low-income communities. Most of the lenders open their shops in Latino and African-American communities. On the other hand, white neighborhoods do not have a lot of lenders.
As one of the requirements to get same-day payday loans AZ, you will have to grant the lender access to your bank account. While most lenders will only take out the amount from your bank account, unexpected withdrawals from your account can damage your credit scores and rack up expensive overdraft fees.
All the extra costs to the already expensive interest rates of the payday loans. If you are on your way to facing this situation, it is recommended that you get in touch with your bank to discuss ways to protect your bank account.
As mentioned in this article, the costs associated with payday installment loans vary from one state to another. In Arizona, the fees can range between $10 and $30 for every borrowed $100. As for a two-week loan, the associated cost can be $15 for every $100 borrowed.
From the above, the rate of interest is just 15%. However, the interest rate will be approximately equal to an APR of 400% because you will have to repay the loan within two weeks. According to calculations, you could procure a daily interest cost of $1.07.
As for contracts with a repayment period of a year, the $100 loan can cost you $391. Thankfully, the lender will disclose the APR before you accept the contract. While an APR of 400% is typical for such financial services, some lenders can have APRs as high as 2,000%.
If you want to apply for check cashing online payday loans, you must fulfill certain requirements. The first requirement you have to provide is proof of age; you need to be 18 years or older to be eligible for this contract.
As for the rest of the requirements, they will vary from one lender to another. However, specific requirements remain the same. To apply for these, you will have to provide the following:
Generally, you will have to repay the payday loan by your next payday at once. Since the repayment terms may vary, ensure that you check for the date in the agreement or ask the lender for the specific due date.
You have a few options to repay the borrowed amount; they include:
Yes, specific lenders offer you the option to roll over or renew the loans if you cannot afford to repay the borrowed amount by the due date. However, most states do not allow rollovers or renewals.
If your contract gets rolled or renewed, you will have to pay a separate fee to extend the contract's due date. However, renewing or rerolling the amount will not reduce the principal amount you owe.
In Arizona, there are lenders that let you extend the due date of the contract. However, others do not allow such. Whatever may be the case, you simply need to look for the right lender.
As mentioned previously, several methods are available if you want to repay your payday loans that accept unemployment benefits. The most common method is handing over a post-dated cheque with the borrowed amount and the interest. Alternatively, you can also provide the lender access to your bank account. If the lender has a dedicated website for repaying the borrowed amount, you can do so. These are just some of the many methods available to repay the loan amount.